If you are looking to take your video production skills to a non-profit and do a little videography work with that non-profit in your backyard, then I highly recommend you take a quick look at Guidestar first, if it is paid work. Volunteering to do free work for a cause that's meaningful - that's on you. There's more on that below, and it's a great way to get out of obscurity.

Today, let’s demystify the tax forms that a non-profit has to file every year, so that you can learn an easy, step-by-step process for deciding if you want to do video production for them.

At the end, I'll have a bonus tutorial for you so you are equipped to handle the guaranteed question you'll face with non-profits (and penny-pinching businesses) "Can you discount your work?" or "Can you do this for half as much?"

But to get there, let's back up a second and understand the why for this tool, Guidestar.

I was introduced to Guidestar a little over two years ago, just before I started getting the idea for Church Films, and I'm thankful that someone took me under their wing to show me the nuts and bolts of Guidestar. I don't know everything about it, and you don’t have to know everything about Guidestar either.

You need to know this: with a handful of exceptions, every non-profit in America has to file a form 990 with Uncle Sam every year (at some point), and this is public information that breaks down where their dollars are going.

Did you catch that? A form 990 is a non-profit’s money report.

Churches aren't the same. Let me repeat that: churches are not the same. You cannot expect to find a form 990 for a church on Guidestar because churches are given certain exemptions, and the long and short of it is, churches report differently than your average bear because churches do a lot of benevolent work that Uncle Sam simply doesn’t have the time/manpower for (nor should he). Here’s a list of other exempt organizations, straight from the horse’s mouth.

All that to say, if you are going to take your video production downtown and work with a non-profit, and you are going to book a deal with these guys, be sure to do your due diligence on Guidestar.

Here’s a word to the wise: if your non-profit doesn’t have a form 990 on Guidestar, then go to the physical location and ask for a form 990. They’re required by law to keep the last three years of physical copies handy.

Now, don’t just storm through a non-profit's doors and demand to see a form 990. I guarantee you won’t close any business deals with them. Once numbers come into the conversation, be tactful and organic about asking to see a form 990. Hopefully you are practicing this art of pitching every week, and you’re able to save them time and yourself time by getting to the “numbers” in the first conversation. If that’s the case, then jump right through the door and ask for that form 990. I’ve yet to do this though because every non-profit I’ve looked at has their form 990 on Guidestar.

1. Create a login

Yupp.

2. Use the big search bar

I's been looking at “Ransomed Heart” a lot lately, so I’ll punch them in again. They’re a non-profit in Colorado. It started off teaching men how to be men, honestly, but it’s grown from that into a hub for men and women.

They’ve got a couple of form 990's on Guidestar.

If you’re on your desktop, you can expect a good, clean layout.

I haven’t used the mobile version of the site because like you, the video producer, I like having a larger canvas to see my work. Us video folks are very comfortable on a laptop/desktop, so this tutorial will you take through the desktop version, but know this: since we’re ultimately looking at .pdfs, it won’t matter what device you use.

Here are a couple of talking points on a non-profit’s landing page in Guidestar.

A. The form 990’s are on the far right, available under the big green button.

B. You can see their mission statement and start date up top.

C. If you scroll down, you can see some of their leadership.

Note: a non-profit does not have to (i.e they are not obliged to) provide Guidestar with the information Guidestar is looking for. Guidestar is an aggregator of information.

If you sign up with your email, you will have access to this huge library of information. Mark their messages for deletion if they blow up your inbox (I haven't had a problem), but the service is well worth your email.

Back to “Ransomed Heart.” They’ve got years of form 990’s on Guidestar. They should have the most current form 990 any day now.

I rarely scroll to the bottom because the form 990’s are right there at the top of the landing page.

Also note: these form 990’s (as with any financial statement) are a reflection of where they (the non-profit) came from. You cannot be certain where they are headed. It’s like predicting the weather - you can’t know for certain. You can only get a rough estimate. You don’t know if they’ll repeat last year’s mistakes or successes for that matter, but nonetheless, I recommend sifting through a non-profit’s financials before committing to video work with them.

“Ransomed Heart” is a (I’m dropping the quotes from here on out) 501c3 organization. That means they are tax-exempt for the sake of their charitable mission.

Can they be taxed? Yes. UBIT (unrelated business income tax... like a church bookstore selling Motrin in its bookstore - that would be taxed) is a real thing for non-profits to deal with, but I won’t get carried away with it here. Non-profits also pay taxes on their employees, just like every other corporation. There’s no such thing as truly tax-free. Bear that in mind.

In Part 1 of the form 990, look for their expenses. In Part 9, you’ll see what these guys are doing with their wages/salaries. Standby.

In 2013, Ransomed Heart (scratch it, they’re RH from here on out) had a total of 2.3 million dollars in contributions and grants, as well as 1.1 million dollars in program revenue: digital downloads, like audio, video, books - the whole nine yards - and they host faith-based retreats. These are meant to inspire and encourage and build people up and mentor them, so on so forth.

They had 3.4 million dollars TOTAL in the year 2013 from all of their programs. In the year 2014, RH brought in a little less than the year before.

Over here, under expenses, they paid out $0 in grants and similar amounts. We’re going to come back to these guys; this is worth comparing to another non-profit.

3. Compare

I am a fan of Compassion International; my wife and I both really respect what these guys are doing, and I'll show you why they're really good with your dollars. Last time I checked, what they’re able to do is they're able to turn around two-thirds of your hard-earned dollar and get that directly into the hands of those who are going out and reaching out to the at-risk youths around the globe.

These guys are doing amazing stuff.

At the top of their landing page, you’ll see the same info: who their top dawg is and the option to look at their form 990’s, as well as their mission statement (it’s pretty bold).

I'm sure they are under a lot of scrutiny, but that's natural when you are operating at their level. Why do I say their level? In the year 2013, they brought in 712 million dollars in contributions and grants.

Then in 2014, they got up to 765 million.

Woohoo! That’s great. Good for them. But this is what you want to see:

Under expenses, they paid out 478 million dollars in grants and similar amounts, and look at that, they got it up to 513 million dollars in the year 2014.

The ole math teacher in me can’t resist, and I think it’s prudent for both us to pull out a calculator:

513/765 is about 67% or two-thirds. That’s a really strong ratio.

Again, that means for every dollar, about 67 cents is actually going into the programming that they exist for (not overhead or admin).

Now, there is nothing wrong with non-profits repurposing the dollars they receive to pay their people. There’s nothing wrong with that, and if you’re of the Bible persuasion, it is Biblically and fundamentally sound for people in a ministry to be paid for their work in the ministry. It is okay.

Some people decide not to live off the ministry - that’s okay too. That’s their prerogative. BUT… when I look at a non-profit, I want to know that they are giving. Because as I teach you, and everyone else, and I myself am learning, it is GOOD to be giving. I promise you - you cannot out-give God, so be giving.

If the whole faith thing isn’t your schtick, that’s fine. I guarantee you though, that even in the agnostic and atheist circles, most folks will agree it is good to be giving. I promise you that giving is a great attitude to have, and it will help you grow as a filmmaker and as a leader. You will be more understanding, more compassionate, etc.

Be giving. Compassion sees it as a core value, and I like that.

The bulk of their expenses (apart from grants) goes to salaries, which makes sense because they operate globally - from the Philippines to South America and everywhere in between. They gots to pay their people! They have a lot of people on payroll!

Are they able to balance their budget?

The last part in Part 1 is line 19: revenue less expenses. Yes, they balanced the budget in 2013, but in 2014, they ran a deficit… not unlike Uncle Sam. ;)

Back to the RH example, they cut it close in 2014, but they were able to balance the budget in 2014. They spend a lot of their money on overhead, and not even half of their revenue goes to salaries.

Caution: If a company does not balance their budget well (especially if it’s a smaller outfit), that could be a red flag.

Compassion pulls in 9-figures every year, and again, in 2014, it was to the tune of $700,000,000+.

There isn’t a movie (a single movie) that I know of that costs 750 million dollars to produce (Captain Jack Sparrow Part 4 as of today, holds the title for the most expensive movie ever made - random, right?). Can you imagine the leadership, vision, time, patience, wisdom (and _________________) that goes into a budget of that size?

For you and I, let’s be good stewards of the four and five-figure budgets so that we can be prepped and ready for the teams we’ll be leading down the road. We want to encourage our teams, support them, equip them, and then go and do the things we’re supposed to do with our films.

4. Part 7

Look to see how your non-profit is paying their top brass.

John Eldredge started (years ago before RH was RH) with this idea of “let’s do this ministry to teach men how to be better men, but let’s do it from a faith-based perspective.” So he, in a lot of ways, is the top brass (CEO he is, yes).

He works 20 hours a week, at $100,000 a year. The other officers make more, but they put in more hours. Per hour, the top brass at RH (John) is paid the most. That’s the alpha system, right? It goes back a few millennia, and you should check it out sometime on any Netflix documentary where lions fight hippos for beach-front property.

In Part 7, you’ll also see how some of the board members work zero hours a week and are thus paid $0 a year. Some non-profit board members will report one hour a week, and they too get $0 for it. This is pretty common.

When you get to that level of leadership, it’s an honor - you are honored to share the wisdom you have with others. In fact, it’s expected. To him who has much, much is required. So you want to keep this in mind, that as you are progressing through the ranks, maturing, and managing larger budgets, more is expected of you, and maybe that looks like a board position somewhere.

5. Part 9

This is the complementary section to Part 7.

Line 5 is a mishmash of the guys in Part 7. Move along; these are not the droids you’re looking for.

Line 7 is where the common man’s wages are lumped. Both lines 5 and 7 are essential for understanding what they pay their people. Again, no one can work for free forever, barring some manna-from-heaven experience from the Almighty.

RH spends a lot of money on overhead, like IT (information tech). We’re talking 6-figures big. For them, it probably makes sense with all of the digital goods they dabble in, both on their site and with live applications at their retreats.

What?! You thought you could just hook up your home projector for 800 people sitting outside at some Rocky Mountain getaway? Pffft.

Again, you need to skim through Part 9 to better understand what your non-profit is willing to spend money on.

I hate to break it to you (if you haven’t noticed):

A lot of businessmen and women see you as an ad expense.

They can’t help but process their world through numbers, and admittedly, it’s hard not to when you’re trying to steer the ship.

This is why I always encourage you to hedge your bets in things that are not temporary. Numbers are finite - and temporary at best.

When you’re in their position (stewarding large crews and budgets), fight the urge to place dollar signs on people.

Don’t do it.

Value people over the numbers, respect them, and let it show. If you’re willing to value relationships and people over profits, risk your dreams and well-being for the people you are surrounded by, then you will get to the Christopher Nolan level of filmmaking (assuming you don’t quit - you bear a lot of responsibility in this journey).

When you’re approaching a non-profit CEO, CMO, or other person of influence, remember that they see you as an expense, and if you’re wondering which one, it’s line 12 in Part 9:

They may have the best intentions in the world and a heart of gold, but at the end of the day, you’re a subset of the ad budget. If there is literally no room in their ad budget (it’s zero or too dinky to hire you), then that tells you two things:

B. They already have an in-house video team or content creation team / strategy.

RH is not someone you want to solicit for video work. They won’t hire you; I know for a fact they create a lot of their own content.

Let’s look at Compassion again. I bet they have a massive ad budget. Ready for this?

6. Pitstop

Let’s see what Compassion pays their top brass.

First, you’ll note in Part 7 that these guys do have board members that get credit for being on the board, but they don’t make a cent. Some of their board members “work” one hour a week.

It may be less for all I know. It could be like when I was in the Air Force. Sometimes, you just can’t quote a job, like inspecting the Flux Capacitor, for anything less than half-an-hour. It was a computer code, a lower bound imposed on the job, even if it only took us 12 seconds to look it over and decide the darn thing was still fluxing. So we got credit for a half-hour of work for something that was pretty simple.

Do their board members invest 52 hours of work in a year for that non-profit? Maybe mental energy and time-in-person comes out to that much, or maybe it’s 12 total hours, and you can’t round down (to zero), so 52 it is!

The Compasion president/CEO logs 40 hours a week. He’s paid handsomely for it, but notice that it’s almost on par with what John Eldredge is bringing home (equivalent of a low $200,000 income). This guy from Compassion, Santiago, is the top-brass of a multinational non-profit that regularly sees revenues of $700,000,000+ and has a global impact on multitudes of children, and he takes a pretty modest salary when you compare it to John's.

Can you imagine the leadership that goes with an organization of this size?

Egad.

Santiago and Compassion have surrounded their workforce with equally skillful, competent leaders who also make 6 figures, but Santiago is the Big Dawg.

7. Part 9... again

Line 3 says how much they give away. For a non-profit of their size, that’s amazing, and it begs the question why the smaller non-profits don’t have the same attitude.

Line 7 says they spend a lot of money on paying their people, which, in their case (global presence) intuitively makes sense.

Line 12 is your friend.

In 2014, they spent 13 million on advertising. That’s almost 2% of their overall budget, and it’s ample room to tell you they care about video (and other branded content). They won’t often drop $2 million on a single video, but they also won’t go to a guy who’s only messing around with 3-figure shoots either. They’ll look to do 5+ figure budgets, and for unnamed guys like you and me, that’s a goal we must never shy away from but work towards with attention to detail, outstanding service, and unshakeable determination.

C. People do not appreciate “free” when they ask for it (see the story of the Exodus, King Saul, Jesus, universal healthcare, primary education, take your pick) - your loudest complainers will always be the ones who pay whatever is “cheapest,” and freeis as cheap as it gets.

D. It creates an expectation.

E. Your HVAC guy doesn’t work for free.

F. You won’t grow as a filmmaker (let’s unpack this).

But it’s for my reel…

Quit moping around! Practice your reel on your own time! Client work is the ONLY place (short of investors) where you can practice the business side of film, and you can’t do that “on your own time” like you can your editing, cinematography, directing, etc.

Klar?

Free work - when solicited - is not worth your time. You’re too valuable, and you have people that depend on you. Even if it’s a one-man shoot, you’ve got someone or something that depends on you to put food on the table, even if it’s just this guy at home:

The converse is not the same. If you want to volunteer your services to a non-profit because you agree with their mission, and you have the time / capital to work for them pro bono, then by all means, approach them!

Why is this different? Because you set the expectations when you volunteer your services - what you will and will not do and you can make those crystal clear in your initial offering. Bueno?

Look at Compassion’s mission statement:

Solid.

These guys do a lot of good for at-risk youths around the globe. So you start thinking, “Yeah, I like that. I’d like to cut a video together for them.” That’s how you need to rationalize these things. If you find a non-profit that you happen to agree with, it’s one thing to volunteer your services; it’s another to be asked to work for free. Remember, non-profits pay their people. Even some one-man-bands (one-man or one-woman non-profits do exist) pay themselves.

...

Recap: if you can’t get a form 990, and you really want to work with a non-profit, stop by, and ask for the form. Be tactful.

Can't find them on Guidestar? Try a simple Google search to see if they're brand spankin' new.

Look to see if a non-profit balances the budget and if they themselves are giving. That’s something my wife and I look for every time we learn about a new charity.

And remember, Uncle Sam rarely balances the budget, so we can be forgiving of our favorite charities if they fall short a buck or two (okay, I'd say anything over 2% is bad) in a given year. This is why you should go the extra mile and look at several form 990’s for your favorite NP.

Okay!

You've made it this far.

When I've been asked to lower my rates, I don't! Not without cutting out work!

DO NOT OFFER the same amount of work for anything less than what you are worth. Simply cut back the work.

To get you started, when a non-profit asks if you'll work for half as much, I've put together a video walkthrough for how you can handle this question.

Everybody asks for discounts when it comes to video work. Be ready - expect it.

There's also a video walkthrough of this entire post, so that you can see how to navigate Guidestar.

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Did you use Guidestar? What did line 13 in Part 9 tell you? Comment below!

I want to encourage others and bring honor to the Almighty in everything that I do with film and video. My goal is to take the first 11 minutes of my tv pilot and seek out decision-makers who can further the conversation about developing it into a show. If my team and I can do that, then we can teach 100,000 other microbudget filmmakers how to do the same thing so that we might tell stories of hope to millions. In the meantime, I'm a son of the King, a family man, a lifelong student of film, and the author of two microbudget filmmaking books.